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Tariffs threaten Alabama jobs

Tariffs threaten Alabama jobs

From Doug | Mon, 07/16/2018 at 02:14 PM

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From Florence to Dothan, Mobile to Huntsville, and every stop in between – Alabama is a proud producer and exporter of goods to countries around the world. In fact, according to the U.S. Chamber of Commerce, more than 567,000 Alabama jobs are supported by global trade.

That means more than one in every four Alabama jobs is tied to global trade.

It also means that the President's trade policies and tariffs have an outsized impact on Alabama's ability to attract and maintain investment in our most valuable industries: automobile manufacturing, farming, shipbuilding, and more.

To be clear: a tariff is simply a tax. Any tariff placed on a product coming into the United States is a tax that increases the cost of those goods to American consumers. When other countries place additional tariffs – or new taxes – on American goods, it raises the purchase price of American products, thereby reducing the ability to sustain competitive markets in those countries.

So it is deeply troubling that recent proposals from the President to levy significant tariffs – and provoke retaliatory measures from other countries – will threaten tens of thousands of Alabama jobs. The most concerning of these is the 25-percent tariffs on foreign car, truck and auto part makers, which is being done under the pretense that these products are a national security threat. That is simply ridiculous. These particular tariffs are being placed on our allies who are playing by the rules, not rogue countries who are not.

Alabama's automotive manufacturing sector is approaching nearly 40,000 jobs and motor vehicle exports topped $7.75 billion in 2017. That doesn't yet include the new Toyota-Mazda plant, which will add another 4,000 jobs and an estimated $1.6 billion in economic development. Alabama is now the third-largest auto exporter in the nation, behind Michigan and South Carolina.

I've urged the President to reconsider going down this path, and I recently joined my Republican colleague Senator Lamar Alexander in sending a letter to Commerce Secretary Wilbur Ross stating the obvious: in no uncertain terms, our auto industry does not pose a national security threat. I am also discussing legislative responses to this problematic proposal with my Senate colleagues.

Then, you have the $34 billion worth tariffs levied against China last week, provoking an equally aggressive response. Notably, a 25-percent tariff on American soybean exports to China. Soybeans are our country's top agricultural export. In Alabama alone, our soybean industry employs more than 10,000 people and produces over 400,000 acres of the crop each year.

Tariffs should be used to protect American jobs – not hurt them. Working-class Alabamians are going to be the losers in this game of chicken with China: the small family farmers, the line workers at our auto plants, the truck drivers who transport Alabama-made products to market.

While I wish it were true, there is no real negotiating strategy from the Administration. China has for years been the winner in our trade relationship because they don't play by the same rules. They frequently steal intellectual property and undermine entrepreneurial American businesses. That relationship cannot continue, but we can't fix it by sparking a global trade war.

Instead, we need to partner with our allies – who have also been treated unfairly – to present a united front against China's harmful trade practices. But even that is getting harder each day with the Administration's pursuit of tariffs on close allies like Canada and the European Union.

I whole-heartedly agree with the President's goal of reinvigorating American manufacturing. But punishing Alabama employers and threatening the growth of these vital industries is not the way to do it.

The U.S. Chamber of Commerce – which represents more than three million American businesses – has said these tariffs are "nothing more than a tax increase on American consumers and businesses – including manufacturers, farmers, and technology companies – who will all pay more for commonly used products and materials."

I can't sit idly by while the President's shortsighted actions threaten good-paying jobs across Alabama.

Simply proposing these tariffs could cause our automakers and farmers to face direct retaliatory tariffs - meaning hundreds of millions of dollars in additional, unnecessary costs that will be passed on to consumers in the form of higher prices or to workers in the form of job cuts.

I'm glad leaders in the state also have come to realize the grave harm these tariffs will do to Alabama. We'll need a full-court press to put a stop to it.